Why UK Universities are Going Bankrupt — Transcript

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1. 0:00this video is brought to you by ground
2. 0:02news universities are one of the few
3. 0:04things the UK still does well British
4. 0:07universities like Oxford and Cambridge
5. 0:09are widely considered some of the best
6. 0:10in the world and hundreds of thousands
7. 0:13of young people come from all around the
8. 0:15world to study in the UK every year
9. 0:18unfortunately like basically everything
10. 0:19else in the UK universities are running
11. 0:22out of money with many universities
12. 0:24borrowing significant sums just to stay
13. 0:26afloat and Industry insiders have
14. 0:28recently started warning about the risk
15. 0:30of outright bankruptcies in some of the
16. 0:33UK's biggest universities so in this
17. 0:35video we're going to have a look at the
18. 0:37UK's emerging uni crisis how the
19. 0:39government's controversial immigration
20. 0:41policies have apparently made things
21. 0:42worse and why the UK really needs to
22. 0:45sort this
23. 0:46[Music]
24. 0:49out before we start if you haven't
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28. 0:58so simply put the fundamental issue for
29. 1:01UK universities is that they're just not
30. 1:03getting as much money as they used to
31. 1:05for three reasons first the loss of EU
32. 1:08funding post brexit when the UK was part
33. 1:11of the EU UK universities received
34. 1:13roughly 800 million EUR a year in
35. 1:16financial support as you might expect
36. 1:19since brexit that number has fallen to
37. 1:21basically zero the government promised
38. 1:23to replace these funds with a
39. 1:24combination of loans and grants
40. 1:26including the so-called shared
41. 1:28Prosperity fund and the recent
42. 1:30announcement that the UK would be
43. 1:31rejoining the eu's Horizon funding
44. 1:33scheme should take some of the pressure
45. 1:36off but universities have complain that
46. 1:38the funding allocation is unpredictable
47. 1:41and the total sums involved don't always
48. 1:43add up second inflation for those of you
49. 1:46who don't know in England accredited
50. 1:48universities and colleges are allowed to
51. 1:50charge a maximum tuition fee of
52. 1:539,250 per year for full-time
53. 1:56undergraduate courses which is basically
54. 1:58what they all charge now this might
55. 2:00sound like a lot of money and it can
56. 2:02feel like it when you're paying off your
57. 2:03student loans but this number has barely
58. 2:06changed since 2012 when tuition fees
59. 2:09were first introduced at
60. 2:11£99,000 they went up by £250 in 2017 but
61. 2:15this is obviously miles behind inflation
62. 2:18and Analysis by data H suggests that the
63. 2:219,000 fee originally introduced in 2012
64. 2:24would now be more than
65. 2:25£12,000 if it had increased in line with
66. 2:28consumer prices this has also forced
67. 2:31universities into essentially spending
68. 2:33less money on tuition with realterm
69. 2:35spending Falling by nearly 20% in the
70. 2:38last few years third a lack of overseas
71. 2:41students because tuition fees haven't
72. 2:43risen with inflation UK universities
73. 2:45today basically make a loss on British
74. 2:48students a recent analysis by the
75. 2:50Russell group for instance found that it
76. 2:52cost about
77. 2:5311,750 to teach your average student
78. 2:56implying that universities make a loss
79. 2:58of about 2, £500 per student which is
80. 3:02expected to increase to nearly £5,000 by
81. 3:042030 as inflation continues to eat away
82. 3:08at the real value of tuition fees so far
83. 3:11though universities have been able to
84. 3:12make up for this growing deficit by
85. 3:14bringing in more and more International
86. 3:16students who generally pay about twice
87. 3:18as much as British students or roughly
88. 3:21about £20,000 each the fraction of total
89. 3:24income from non-eu International
90. 3:26students has now risen from less than 5%
91. 3:28in the 1990s to about 20% today and in
92. 3:322022 the latest year for which the
93. 3:34government has published data there were
94. 3:36nearly 700,000 International students
95. 3:39studying in the UK however this strategy
96. 3:42has become increasingly difficult for a
97. 3:44couple of reasons first in an attempt to
98. 3:46attract more International students
99. 3:48certain universities have started
100. 3:50lowering entry requirements for
101. 3:51international but not British students
102. 3:54the University of York for instance now
103. 3:57admits International students with the
104. 3:58equivalent of B BC at a level while
105. 4:02typically requiring 3 A's from British
106. 4:04students this has become politically
107. 4:06controversial and upset some British
108. 4:08students who feel they're losing out on
109. 4:10University places just because the UK's
110. 4:13higher education model is broken but
111. 4:15second and perhaps more pertinently
112. 4:17International students have become
113. 4:19rolled up in the government's efforts to
114. 4:21reduce net immigration into the UK which
115. 4:24hit an unprecedented high of 745,000 in
116. 4:282022 quite lot of this was driven by
117. 4:30student visas in 2022 the home office
118. 4:33issued nearly 500,000 study visas and a
119. 4:36further 140,000 visas for dependents I.E
120. 4:40students partners and children's an
121. 4:42eight-fold increase compared to 2019 in
122. 4:46an attempt to bring these numbers down
123. 4:47at the beginning of the year the
124. 4:48government banned students from bringing
125. 4:50dependence into the UK while this policy
126. 4:53is defensible after all that eight-fold
127. 4:55increase does suggest the system is
128. 4:57being gamed in a sense it was a IED by
129. 5:00some pretty aggressive language which
130. 5:02was widely reported in the international
131. 5:04press and has apparently spooked some
132. 5:06International students data from enoli
133. 5:09for instance a platform that many
134. 5:11overseas students use to apply to the UK
135. 5:14suggests a 37% year-on-year drop in
136. 5:17overseas postgraduate students with the
137. 5:19sharpest decline coming from South Asian
138. 5:21countries and Nigeria similarly ucast
139. 5:24data suggests that overall non-eu
140. 5:26applications grew at their lowest rate
141. 5:29in six years unsurprisingly this has put
142. 5:32University finances at real risk
143. 5:34analysis by PWC suggest that without a
144. 5:37significant increase in international
145. 5:39students about 50% of all UK
146. 5:42universities will be losing money by
147. 5:452025 and that figure could rise to 80%
148. 5:48if there was a significant decline in
149. 5:50the number of foreign students already
150. 5:53there's been some Rumors in the industry
151. 5:54that a handful of universities are now
152. 5:56at risk of bankruptcy if a big
153. 5:58university were to go bankrupt no one
154. 6:01really knows what happens universities
155. 6:03are supposed to have emergency plans to
156. 6:05merge with one another in case of
157. 6:07bankruptcy but whether this would really
158. 6:09be politically or practically feasible
159. 6:11for a big university is as yet unknown
160. 6:15and the government would doubtless come
161. 6:16under pressure to bail them out so you
162. 6:19get the idea universities are running
163. 6:20out of money in the UK and this is
164. 6:23particularly bad news because well
165. 6:25universities are one of the few things
166. 6:27the UK still does well world rankings
167. 6:30consistently show the UK has more top
168. 6:33rated tertiary education institutions
169. 6:35than the rest of the EU put together
170. 6:37with Oxford Cambridge and Imperial
171. 6:40reliably appearing in the top 10
172. 6:42unfortunately there's no obvious answer
173. 6:44neither political party wants to
174. 6:46significantly increase public spending
175. 6:48and it's hard to imagine the electorate
176. 6:50tolerating higher taxation to fund a
177. 6:52sector that many voters see as an overly
178. 6:55politicized industry designed for outof
179. 6:58touch Elites raising tuition fees isn't
180. 7:00a great fix either given that the
181. 7:02government already estimates about 40%
182. 7:04of students will never fully repay their
183. 7:07loan similarly moving towards a system
184. 7:09where prices better reflect the actual
185. 7:11value of different degrees makes
186. 7:13economic sense but might price out
187. 7:15poorer students from more prestigious
188. 7:17degrees nonetheless it's imperative that
189. 7:20this government or the incoming labor
190. 7:22one gets this right given universities
191. 7:24are both one of the UK's top exports and
192. 7:27an effective vehicle for British soft
193. 7:29power now to see whether labor are
194. 7:31actually successful at this you'll need
195. 7:33to keep up to dates with policy
196. 7:34developments here in the UK and lucky
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